Building a home

If you’ve ever thought about ways to increase your rental income, this topic about indoor swimming pools is for you.

One of the things we do to help our cabin owners in maximizing the return on their investment is to keep up with the trends and amenities that are the most appealing in our clients’ best rentals. And one of those things that we are finding to be successful more and more are indoor swimming pools at the cabins in our area. Indoor swimming pools are the latest and greatest amenity for investment cabins. At first glance, that sounds absolutely dreadful. However, before you say no to the idea, let’s talk about what makes indoor swimming pools so attractive to renters.

Let’s start with one of the most apparent truths about rental cabins in the Smokies: any cabin can, and does, rent throughout the summer months, our most popular time of the year for obvious reasons. Kids are out of school and people are vacationing. Dollywood is open. The National Park is holding all kinds of workshops. It’s not commonly known, but it’s true: if you have a cabin that you are renting out to vacationers, then you know you can pretty much count on people to stay at your cabin during the summer. Therefore, if you are an investor, you really never have to be too concerned with amenities like outdoor or community pools as being important to offer guests in the summer time.

The game for increasing investment revenues is to fill in the calendar. You need guests to stay at your cabin during the non-peak months in order to reach that revenue gap that really makes your investment profitable. Indoor pools make that possible. In the first few months of the year when it is cold, snowing or raining, and people just don’t want to go out to do anything, an indoor swimming pool provides hours of fun for your guests. Cabins with indoor swimming pools will attract guests who might not have even made the trip otherwise. What a cool thing for people to be able to stay in a cabin with an indoor pool!

So, let’s look at how indoor swimming pools affect your income.

You’re adding bookings in the winter time, bookings in September before the leaves start to change, and bookings during spring break. These are bookings you probably wouldn’t have had otherwise. It gets you past the unpredictability. In addition to the increased number of bookings, you’re also able to charge a little more for the added amenity. Owners of one to four bedroom cabins who have indoor pools are seeing gross rental income amounts of $20,000 to $30,000 more than owners of similar sized cabins without pools are earning.

How much does it cost? Well, if your cabin can be remodeled to include an indoor swimming pool, the cost to install it starts at about $30,000 and go up to $150,000. You will have some additional expenses each year, such as insurance on the pool (you’ll need to shop around for that, as not everyone offers that coverage) and there will be costs for cleaning that you can pass onto your guests. So the best news is that depending on the amount you would spend to put a pool in, it should pay for itself within just a few years. And if you ever decide to sell your cabin, the pool will increase its resale value.

Before you put an indoor swimming pool in, check with your local zoning board to make sure you are following the safety requirements. Some examples of the requirements include a door lock with a coded pad – preferably one that is high enough up the wall that small children can’t reach it, a motion alarm for the water to alert other guests if someone enters the water, and only one door that allows access to the pool room. You’ll also want to make sure you have a way of controlling the chlorine smell. Also, keep a cover that can be placed over the pool in between guests. This is very helpful in reducing moisture levels in your cabin.

One of our specialties is building cabins with indoor swimming pools, and we’ve been helping clients do that for almost five years. Some of our builders have been constructing cabins with indoor pools for even longer, so we are always here to help answer any questions you have about putting a pool in your cabin – or even building a new one to upgrade to!

As always, my staff and I are here to answer any questions you may have. If you’d like to learn more about how indoor swimming pools can add to your annual rental income, call me at 865-765-6157 or 865-654-2111.

We are frequently asked, “So what’s going on with new construction in the Smokies, particularly with cabins?”

Oh my goodness – what a question! As many of you know, we have been involved in bringing back new construction to our Great Smoky Mountains for the last two to three years. Through our partnership with developers in Sherwood Forest Resort, we have overseen the construction of dozens of new cabins there. More recently, I shared plans to create additional new resorts in our region. The work has been slow going but extremely rewarding, and we are excited for the future as more cabin construction takes place in those resort locations.

In a nutshell, new construction is continuing to make its way forward. The values of existing properties are escalating to the point that they are close to intersecting with the price of building based on average price per square foot. That is exciting for the contractor, the developer and for you and me! It’s still not easy and market prices are advancing slowly, but progress is being made.

Of course, the loss of hundreds of cabins and homes in and around Gatlinburg has affected new construction in several different ways. As you can imagine, there has been a huge interest in building back destroyed structures. Home owners and cabin owners are looking to replace what they lost in the fire and in some cases are in a bit of a scramble to locate a plan, find a contractor and tie down some material to build back. However, it is not a straight forward process. Building permits are required and there may be new building codes that weren’t in effect when the original structure on the property was built. Owners have so many new issues to consider as they work on a plan to rebuild. For example, the foundations have to be assessed for stability. Can they be reused, or must they be demolished and cleared away before new construction can begin? Do we have adequate utilities? Are the septic or sewer lines still in place? What about the water lines or the well head? What is the resort or neighborhood going to look like in the next few years? These are just a few of the items owners are dealing with, and as a result rebuilding may not be a feasible option. There are many who have decided to not pursue rebuilding but have already replaced their properties with a home in another location. Some have simply decided to wait and see how things go before wading into the decision to rebuild.

Ultimately, I believe there will be several outcomes. One result will be a boost to building. Subcontractors are being attracted back to the area. Those who had laid down the hammer and now work at places like Dollywood may return to the profession. This will create more activity and building opportunities for those who want a newly constructed home or cabin. Along with new construction, we are also going to see a facelift to some areas that were becoming a bit tired as properties had aged. Historic and areas that were well loved like Chalet Village in Gatlinburg will have new life as home owners build new chalets and cabins on property. We are still trying to see the bright side of what was a very dark day. Actually one of those positives is that views that had been lost to thick trees now have outstanding vista views as nature pruned itself.

A side note that many of us didn’t realize is that nature actually needs fires from time to time. It provides and enrichment to the soil, natures fertilizer. There are even seeds that only are activated by fire. You can see it already in the regrowth along the side of the National Park roads as the green growth returns. It looks like a St. Patrick’s Day parade of lime green color!

In the short run, the fires will cause market prices to further increase. The number of residential properties for sale in the Great Smoky Mountains was already a bit down even before the fires. Now it is down even more with the new influx of cabin buyers looking to replace lost properties. Many of them are visiting properties with an insurance check in hand, so they might be willing to be a little more competitive with their offers.

A third result we will see is difficulty in attracting contractors to individual projects as they are in high demand and probably will have more than enough work to keep them very busy for the foreseeable future. However we have been contacted by contractors just outside of our area willing to travel an hour or so to work. I think it will take more perseverance to find a quality, knowledgeable contractor but it will be possible. Feel free to ask for our help as we work our way through the contractors; we can send you in the right direction at least with the right questions!

We have also seen lending open up to new construction. When I started 3 years ago representing builders and developers we could hardly talk anyone into giving us money for logs and nails – but now every month I am being approached by a new lender who is putting their toe in the new construction loan waters. That is really good news. The required minimum down payments amounts are being relaxed. Right now, you can build a residential home for as little as five percent down, and you can use your lot as a down payment. The lending terms on an investment cabin come with a 20 percent down payment requirement for the construction loan.

So if you’ve ever thought of building your perfect home, this is the time to start dreaming with those cabin plan books or house plan books! Construction is back to stay for a good long while! Over the next year, lots of us are going to learn to build again and how to understand new construction… not a bad thing if you are like me, and love construction projects.

As always, I and my staff are here to answer any questions you have about the real estate market or new construction.

A wildfire that’s been described as the worst in the last century came raging from the National Park’s Chimney Top area just a little over a month ago. With so many displaced, it has left us with a real estate nightmare.

Evaluations have determined more than 1,100 properties were destroyed by the wildfire and about as many were damaged in some way in Sevier County.

It is times like this that we recognize the incredible value of human life and the sweetness of each day that we arise to see the sun and smell the coffee brewing. The toll on human life is 14 at this point. Every life is incredibly precious and no words can ever adequately describe the grief, nor can any words ever feel rich enough when we attempt to comfort out friends and family.

But even in times of tragedy, we retain our hope. Resilience and confident resolve is what we heard out of the community leaders, from the mayor of Gatlinburg to the pastor of Roaring Forks First Baptist Church to the mom digging through the ashes to find any keepsake that might have survived. All were looking forward and not backward. All were celebrating the lives that were saved and concentrating on the things that matter: we have each other.

As a REALTOR, my phone began to ring with one caller after another telling me of the house I had sold them. Many of these were second homes, cabins that were to be their ticket to retirement. Now those homes are gone.

“What do we do now?” was the question uttered over and over again with each new call.

I always say there is some silver lining in every dark cloud and I am looking for it now.

Here are some things we can expect. Insurance adjusters will be working day and night for another few weeks to determine property values as they assess the damage from the wildfire. Most of the properties will be covered by some kind of insurance, but many insurance policies will not cover actually replacement. This means that not all of the destroyed structures will build back. Decisions will be made as to whether to just pay off the mortgage (if there was one) and buy an existing home, rent for a short time while life is being sorted out and healing is beginning, or build a new structure on the existing lot.

BUYING A NEW HOME

Buying a new home will probably seem the best route for some who lost their home in the wildfire, so it’s important to understand the challenges before making a final decision. Inventory of total homes in Sevier County for sale is a bit low so those choosing to buy may find they do not have as many homes to choose from as they would like. It may be necessary to move further out of the area and commute. Purchase prices of existing homes are still generally lower than the cost to build new, however. So it might be a win to find an existing home. Each homeowner who has lost a home in the wildfire needs to examine his or her insurance policy to understand the pros and cons of the options offered. Due to inventory shortage, I would suggest that you contact a real estate agent as soon as you can and begin looking at what might be a possible home for your next season.

I would also encourage you to contact a lender and discuss your situation. Ask them about their best lending products. There are a number of loans at this time that do not require any down payment for a very low down payment. Interest rates are also very low, so you will be pleasantly and possibly surprised at the monthly payment. All of Sevier County qualifies for what’s called a rural development loan, which is a government backed loan that doesn’t require any down payment. Another loan that might be needed to give you more options is a rehabilitation loan. It allows you to borrow more than the price of the house in order to remodel or add onto it. This might be necessary as you may not find the exact property you were looking for and you would desire to make adjustments to it. It could even allow you to consider a property that would be an overnight rental cabin or chalet without, say, a garage or storage or a kitchen that is satisfactory but in every other way met your desire. You could borrow enough to cover the price of the home and the changes you want to make. This would allow you possibility of opening up your search. This way, you would have a house to live in while you make it a true home that meets your needs.

If buying a new home isn’t the right option, you do have other choices.

RENTING

Another option you can consider – and we are asking our sellers to make this option possible – would be to place an offer on a home with a stipulation that you can occupy it immediately while you are completing the insurance claim on your home, and while you are possibly also applying for a loan. In real estate lingo, this is called early occupancy. You are allowed to move into the house that you were buying as soon as you have a binding contract. You go ahead and place the utilities in your name the seller keeps the insurance on the building intact and you keep insurance on the contents during the occupancy time. Depending on how the seller is situated financially, they may be able to waive a monthly fee for this early occupancy. Sellers are particularly inclined to do this when they have received a generous offer on their house. And in some cases they will have a mortgage and would not be capable of allowing of allowing you to occupy without asking for a monthly fee and it would be treated like rent or it could be placed against the purchase price and you would receive a credit. There are a number of ways to approach this. You can depend on a good realtor to guide you in this process.

Those choosing to rent will also find that the number of rental properties available is really slim in our area. You might consider checking into overnight rental companies and see if they have any houses that would do month to month leases. RV parks have become popular for those who are not quite ready to build or buy so they temporarily house themselves in their RV. Perhaps a road trip would be a positive way to get some perspective if you can work from the road or are retired. Perhaps Sevier County individuals who have RV’s sitting in their drive ways would consider renting it to those of us who need some months of temporary housing/shelter? Or it might be possible to purchase one and place it on your lot while you build back.

REBUILDING AFTER THE WILDFIRE

If after looking at your options and your insurance plan it seems that the very best option for you and your family is to build back, then here are some things to keep in mind. It’s important to understand that you may not be able to build back exactly what you had before the wildfire. You’ll want to check into this before you get too far down the road. The reason is that we have had many code changes, particularly in relation to fire codes and so the house that burned may not in today’s world meet regulations. You will want to know whether you are grandfathered in or whether changes will need to be made. You’ll also want to know what type of permit you had for your septic if you were not on a sewer.

Get a diagram from the health department of your septic field line. You may find that your septic system was not permitted for as many bedrooms as you had. This was very common in Sevier County until just a couple of years ago. Before then, when a home was sold the seller and agent were not required to advertise the number of bedrooms it was permitted for, so this discussion may not be something you had at the time of purchase. The good news, however, is that it is possible to increase your field lines and to increase your capacity for your septic but it is something you will want to check into before you get to far into the rebuilding process. Have a geologist check out your foundation and see if it is going to need to be replaced or whether you can build back up on it.

We have many good builders in our area but due to the devastation of the downturn in the economy we lost much of our contractor industry, so we do not have enough licensed builders to handle what will be necessary to restore our area so this will be a challenge. In the last few weeks I have met with builders who are preparing to ramp up their construction companies, who have built many, many Sevier County homes in the past. They will be very well connected and able to handle many projects. You do want to be very, very careful as to whom you choose as a builder. There are so many horror stories and many ways that building can be a heartache (or maybe just a headache). You will want to be careful that you do not go with in a “fly-by-night” operation or get involved with anyone coming into the area looking to take advantage of the situation so be careful. Feel free to call our office and get a list of contractors that we have done business with, contractors who have a superb track record that we would be able to endorse. It is also going to be a challenge to build back in that it is more expensive to build then where the current market pricing for existing homes is, so you will need to find creative ways that do not negatively impact the pricing structure of what you’re building to get it into budget.

So I am sometimes asked, “What is the value of building back?” That’s a fair question. We do not expect that the majority of individuals will pursue the construction process so those who do need to have the very highest property value if they were to resell it. It will be important to evaluate your area as well. Are there going to be buildings restored around you, or are you going to be located amid a wasteland of foundations? What type of quality will you have around your new construction?

If you choose to sell your lot (or land depending on all the factors mentioned above) will it produce value? I would expect that many areas will have an abundance of lots, and that will in turn drive down the price. You will also want to consider if you are in an HOA whether it will require that you continue to pay a monthly fee. Will they require that you remove foundation and debris? These are all expenses and consideration should be given to those questions. You will also be paying property tax on your vacant land. With as much property as we have lost in the wildfire, there are not going to be a lot of buyers for your land at premium prices.

One little side note: it’s worth thinking about how many of us now have wide open views previously blocked by many beautiful trees. Though we are saddened that we have lost so much beautiful vegetation, nonetheless we now have a knocked down crazy good view. I would recommend that you plant vegetation that will control erosion but that would not block future views. For example, indigenous plants like rhododendron, Mt. Laurel and Hemlock, dogwood , and holly are all plants that don’t grow high or don’t mind being trimmed.

Whatever your decision, we are here to help you through the process. If you are looking for a new home, we can take you to see what’s on the market. If you are looking for a place to rent, we can put you in contact with people who can help you find a place. And if you lost your home in the wildfire and want to build back, feel free to contact us also for a list of cabin builders that we consider highly.

Looking for a cabin you can eventually make a retirement home? Hibernation Station could be the perfect place for you!

If you’ve been following our newsletter and blog articles the last couple of months, then you know the exciting news for us this year has been the new cabin construction getting started! If you are looking for a cabin in a brand new resort that can serve as a second home and eventually, a retirement home, then Hibernation Station is a resort you will want to consider.

Located near Wears Valley and Walden Creek, Hibernation Station will include as many as 30 cabins when it is completed. The great thing about this new resort is that the lots are very large, so the cabins built there won’t be “cookie cutter” designs. It’s still a bit cost prohibitive to build small cabins, but we have designs for 3, 4, 5, 6, 8, 10, and 12 bedroom cabins. We’re far enough long in the process that new buyers can tweak a few cabin floor plans that we have already built in other locations.

Also, because of the size of the lots, each cabin in Hibernation Station will have at least some privacy. You won’t see cabins right next to each other like you do in other traditional vacation resorts that specialize in overnight rentals. We’ve also made creating a resort where people can live if they choose to one of our top priorities. We’re including some unique amenities that are meant to appeal to owners in a way other cabins usually don’t, hint- think garages!!

You read that right – cabins in Hibernation Station will include a garage for people who plan to move into them at some point. They can be a great retirement home down the road, but you’ll be able to increase your rental income in the meantime while the garage is being utilized as a game room for your guests. In fact, if you just want to move in right away once it’s finished, you will be able to do that! Live it in for a few years and then rent it out if you prefer. Or make it your second home if you like. These cabins at Hibernation Station will be built with flexibility to meet several goals and change as the seasons of your life change.

Speaking of the game room, the amenities in these cabins at Hibernation Station will rival anything you might find in resorts like Black Bear Ridge – indoor pools (these are the biggest draw in vacation cabins right now), tongue and groove designs throughout, walls of glass, lots of use of log trim, etc. Furniture comes included in the new constructions and the décor will be the highest quality, with ceramic tile slate and rock mosaic showers. Hibernation Station cabins will generate as much in gross income as anything we’ve have built in other areas in Pigeon Forge and Gatlinburg. A three bedroom cabin is producing $80,000 and more!

Our builder for this resort is a well-known and well respected builder in our area. Mountain Cabin Builders LLC, founded by Jeff Harris, has been very beloved by many of our past clients who have had cabins built. They have asked Jeff to come back and create additions after their new home or cabin was finished. Jeff has been building homes and cabins in our area for almost 20 years and is a high caliber custom builder. We are very excited to be representing him on this project!

One other thing about Hibernation Station resort – we are building a spec cabin, which is very rare to be able to do these days. But because this is a new resort we want our potential buyers to have something they can see to help them visualize what their own cabin could look like when it is done.

You are going to find that building a new cabin is a bit more expensive than buying something already built, but many of our owners feel like the additional investment is worth it when they consider the rental incomes generated from a cabin designed for rentals. For these cabins, the personal touches we’re putting into them to serve as second or retirement homes is something you won’t find too much of in the Smokies. The bottom line is that new cabins outperform older cabins.

Our past clients who have transitioned to newly built cabins can testify to that. About half of our new construction cabin owners are not new to cabin ownership. They have done well with cabin rentals in the past and they see the potential in the new cabin construction so they have placed their older cabin on the market and used the proceeds to build a new one.

If you are a cabin owner and would like to find out if investing in new development by selling your current one is the right decision, we will be happy to give you some of the parameters we consider important when making that decision. Or, if you would just like to discuss the pros and cons of cabin building further give us a call and we will be happy to brainstorm with you. We have made new construction a specialty, despite the challenges! We will continue to focus on building and will be happy to share the good as well as the bad. New cabin building is not for everyone but for those it is right for there are definite benefits!

Call me at 865-765-6157 or my support line at 865-654-2111 if you want to learn more about Hibernation Station.

I’m so excited about the new construction in the resorts this year (as announced last month), and leading the way in the new development projects is Black Bear Ridge.

Many of you know Black Bear Ridge has been one of the most popular resorts in our area mostly due to the location, being just an easy 10 minute drive from all the attractions in Pigeon Forge. The resort suffered a terrible fire several years ago and many cabins were damaged or destroyed in this fire. The really good news was that it occurred on a Sunday and no one was injured. The other good news was that my clients who lost their cabins in Black Bear Ridge Resort recovered fully with wonderful insurance that paid them for rental proceeds lost and paid them to build their cabin back.

Now, there is good news for you as well. With so much new construction planned in Black Bear Ridge, you now have an opportunity to own a new cabin in the resort. What’s more, most of these will have pools on the lower level! Many of them have outstanding views as well.

These cabins at Black Bear Ridge are being built by investors who will finish them and then sell them to new owners. You can choose one while it is being completed. If you time it right, by the time your loan is completed, your cabin will also be finished. Some of these will be just right for second homes. Some will be perfect for rental programs generating heavy incomes due to the amenities such as a game room, indoor pool, large bedrooms, wonderful views, and of course, superb location. They are all true log on the main floor and are finished with gleaming tongue and groove walls that renters absolutely adore!

The new cabins at Black Bear Ridge come equipped with fireplaces, granite counter tops in the kitchen, and large attractive ceramic showers. Each floor plan is different and the number of bedrooms and sizes vary greatly as this is a unique situation where the size is “grandfathered in,” based on what cabin it is replacing.

Incomes for these new cabins at Black Bear Ridge will vary based on how you finish your cabin with games, a theater, a hot tub, etc. Some of the three bedrooms will bring in incomes of around $70,000. Some of the four and five bedrooms will have incomes in the $100,000 and higher. Again depending upon what you are offering and how you are renting your cabin through. Many rental companies are interested in renting these cabins as they would love to have a cabin with an indoor pool as part of their offerings. We have several rental companies who have expressed interest in offering a high percentage split to new owners as a means to entice them to rent the cabin with their rental company. We are happy to help you navigate those decisions should you decide on one of these cabins.

It is also of interest that recently the lenders have begun to consider the income of a cabin when figuring out how much mortgage you can afford. They will allow a percentage of the income to be considered. This often will allow you to qualify for more cabin than you would normally expect.

Finally, let me share with you a secret about choosing a new construction cabin: sometimes when viewing these cabins you need to go see finished cabins in order to understand what you are seeing. When buying a cabin without décor and furniture or finishing touches like lighting, landscaping, paving etc. it takes more of an imagination to see the finished product. But for those who can in vision it a super great value can be had – the latest floor plans, the best amenities, new everything! You might want to consider taking a look at Black Bear Ridge! If you’d like to know more, I and my staff are always available to answer questions.

Call me directly at 865-765-6157 or my support line at 865-654-2111. We will be glad to meet with you about the available lots in Black Bear Ridge!

This month, I have some fantastic news that I am very excited to share with all of you! New cabin builds in the Great Smoky Mountains are about to begin!

It has been about 7 years since new cabin building came to a halt following the housing crash in 2008. Slowly but surely the market has steadily recovered to the point that building is no longer so cost prohibitive that it can’t be done.

One fantastic example is Sherwood Forest Resort. It has been leading the way for the latest season of new cabin building.Sherwood Forest Resort had many special attributes that made that possible. They also had very high quality developers who have been tenacious and humble and willing to endure the trials necessary to make a comeback. Sherwood Forest is in a superb location. First, it’s close to both Pigeon Forge and Gatlinburg. You can be at Dixie Stampede sitting down to dinner in less than 10 minutes! Secondly, it is in a location with gas lines, utility water and a sewer system already in place. The infrastructure is so important when it comes to new resort development. Many cabins in our region have wells and septic tanks but new construction has to meet different regulations for things like water pressure. Developing the infrastructure in areas without a system already in place can make a new cabin too costly, such as the cost of installing a septic system if it has to be put in because the cabin can’t connect to a public sewer or water line. The resort at Sherwood Forest also came “cable ready.” Most importantly, the resort provided larger water lines to each of its fire hydrants to increase the water pressure. Larger cabins such as these also require higher water pressure levels for their sprinkler systems, so having the public utility system provided for that need, too.

Did I mention the view? It’s awesome! Guests at Sherwood Forest are looking right at the National Park, and more specifically, Mt. Le Conte! Best of all, the cabins in the resort were able to be built without having to blast rock in order set the cabins’ foundations.

The Sherwood Forest cabins were designed with the most discriminating renter in mind at every stage of design and construction. To start with, these new cabins were outfitted with the highest quality material, tongue and groove walls throughout, ceramic tile, and granite commercial flooring. Each was constructed with walls made of glass, incredibly huge game rooms, open floor plans, stone fireplaces, private baths for each bedroom, theaters and the biggest amenity – an indoor pool. The idea was to have a cabin so magnificent that once a visitor stayed there they would never want to stay anywhere else again! To accomplish that, we made sure they were jam packed with entertainment, hot tubs, decks overlooking the park where guests could sit and enjoy the views, spacious places to enjoy the Great Smoky Mountain with family and friends.

And our vision paid off for our investors. The rental income has been absolutely fantastic! Three bedroom cabins are generating over $100,000 in rental income a year and it just gets better from there. We actually have a 12-bedroom that is bringing in revenues over $300,000. All this means that you can buy a cabin, enjoy vacationing with your family, and make money at the same time. In fact, many of our investors have moved money from other type of investments. One comment we have heard more than once is, “your family just can’t enjoy your stocks and bonds like you can enjoy a cabin!” We think they have a good point!

Now, a few other resorts are opening up for new cabin construction as well.

Hibernation Station in the Wears Valley area is clearing lots as we get ready to launch a new 5-bedroom plan this fall. Mountain Shadows in Gatlinburg is also tweaking a floor plan that will be second to none, and Black Bear Ridge Resort is being built back. In Black Bear Ridge there are many interesting floor plans being built where the fire took its toll almost three years ago now. We are confident these new cabin designs will perform as well for their owners as Sherwood Forest has.

You are going to find that a new cabin costs a little bit more than buying something already built, but many of our owners feel like the additional investment is worth it when they consider the rental incomes generated from a cabin designed for rentals. The bottom line is that the new cabins are outperforming the older cabins. About half of our new cabin owners are not new to cabin ownership. They have done well with cabin rentals in the past and they see the potential in the new cabin construction so they have placed their older cabin on the market and used the proceeds to build a new one.

If you are a cabin owner and would like to find out if investing in new development by selling your current one is the right decision, we will be happy to give you some of the parameters we consider important when making that decision. Or, if you would just like to discuss the pros and cons of cabin building further give us a call and we will be happy to brainstorm with you. We have made new construction a specialty, despite the challenges! We will continue to focus on building and will be happy to share the good as well as the bad. New cabin building is not for everyone but for those it is right for there are definite benefits!

So you want to build a home?

I’m so excited for you! I love building. I’ve built several custom homes myself and every time was a grand adventure.

How do you know that building is right for you? Let me outline the process.

First, in order to make the decision to build a home I would suggest you go house/cabin shopping first.

Perhaps what you want to build is already out there. Nine times out of ten the purchase price of a home is less expensive than what it costs to build that exact same home. So maybe with a little remodeling you can create your perfect home and spend less money than if you built from the ground up! It’s a lot like building only quicker, not as complicated of a process, and often easier to finance. While you’re looking and nothing is coming up right, you’re in the process of finding out what you really want when you do decide to build a home. This is definitely not a waste of time.

While you’re searching, it’s a good time to accept that, “No home is perfect.” Or if it is, you – like most of us – wouldn’t want to spend the amount of money it takes to make it “perfect.” The level of mastery to make a home perfect is just absolutely crazy expensive and time consuming. So, relax. Unless you really have pockets lined with gold, now isn’t the time to be a perfectionist.

If after a thorough search, you discover the home you want doesn’t exist, the first step to build a home is to call a lender. Many construction lenders disappeared in the financial downturn, so you’ll need to be persistent. We know of about four in our area that have lending products to help people build a home. All have a bit different terms, so you’ll need to walk through the various options with them before you commit to any decisions. You may want to begin with the bank you do your banking with if you’re a local resident. If not, call us and we can send you in the right direction.

With most lenders who offer construction loans, your construction loan will need to be rolled into a permanent loan when it’s completed. You’ll want to address that at the same time (unless, of course, you have cash to build a home with). In that case you’ll just need to make sure you have dotted your i’s and crossed your t’s with your builder and know the entire cost of your project. You’ll also need to be prepared to make payments during construction on the amount of money that’s been used to build a home. Some personal budgeting will be necessary. Construction on a custom home/cabin generally never takes less than 6 months. Often it is 10 to 12 months before completion.

Once you have secured a loan, you’ll want to meet with an architect or draftsman. You’ll need to be ready with pencil sketches of your ideal floor plan. Also, a list of wants and don’t wants and a collection of photos and magazine clippings can help your drawings move more quickly to the reality of your dream home.

At the same time, you’ll need to select a builder, or general contractor. We can help with this process as well. We have a wonderful group of builders we can highly recommend. You will want to go and visit other homes that your prospective builder has completed. Talk to homeowners about the builder’s past projects. You need to feel that you can work with this individual for half a year to a year. This is probably the most important next person in your life.

Lastly, you’ll want to nail down your lot or land. It can be a real advantage to have your builder and your designer look at your potential land in order to determine that the home you are envisioning will go well on the chosen spot. There are several items you’ll want to discuss with your builder, such as the lay of the land, the steepness of grade (this will be important in determining where the main floor will be vs. the basement), and what the driveway will look like and potentially cost. Also, you will need to know what types of utilities are available for this lot. Do you need a septic? If so, where will the field-line probably need to be? What about a well? If there are cuts in a bank for a road, or a stream or pond you will have to meet field line regulations. What about the covenants and restrictions? Who controls the zoning for the area where you are plan to build a home, and what are their rules that might affect your construction? Your builder and architect will help you navigate these questions and choose a lot that is just right for you. At this stage they are also helpful in keeping you within your budget. A driveway that meanders from the bottom of an acre lot will be more expensive than a driveway cut in from the top and is 1/3 the distance.

So after you have chosen a lot, it’s time to go back to the drawing board! At this point don’t lose sight of overall value. It is important as you go through the process to check yourself. Ask yourself: am I creating a home that will have a very healthy resale value? Often mistakes are made by custom home-owners when they customize their home too much in a way that doesn’t appeal to a future buyer. Be careful. Life happens and you never know when circumstances will cause you to need to move on to your next adventure, so you definitely want to make sure that new house you just built a few years ago can be sold for at least as much as you’ve put into it (or even better, for a profit)!

The best way to make sure the resale value is there is to have the home designed by someone with a great talent for it. If that’s you, that’s awesome! You can do really well making your money back when it’s time to sell. If it’s not you, you are going to want to find someone who can do a great job for you and trust them to build a home that matches your dream.

So to recap: new construction is not a project for the weak at heart, as you can face some unforeseen challenges during the process. Try to find a home that suits your desires before you embark on the process to build a home. But if you decide the choice to build a home is right for you, go for it! The key is to keep a level head, be prepared to troubleshoot creatively, and make sure you are managing your resources along the way. Just stay focused on the joy that is waiting for you when it’s finished and you are able to move in!

If you are ready to build a home and are looking for that perfect lot to put your new house on, I would be glad to help you with that – call me at 865-765-6157, my support line at 865-654-2111, or my office at 865-429-2121.